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Uncertainty surrounds muncipalities’ participation in LNG advisory board

Posted: April 2, 2014 - 12:42pm

Municipal leaders throughout the state say they are pleased with the development of the Municipal Advisory Gas Project Review Board, but participation concerns remain.

The concerns were expressed in a Monday press release.

Kenai Peninsula Borough Mayor Mike Navarre said while establishing the board is an attempt at giving the local government leaders some involvement, questions about what the board will have access to and how its recommendations will be incorporated remain.

“It’s not really well defined at this point,” he said.

According to the release, negotiations regarding the Alaska Pipeline Project to run an 800-mile liquefied natural gas pipeline through the state to an LNG plant and terminal currently lack a mechanism for the board to participate or offer suggestions in negotiations.

“One of the things that the mayors … have been raising is that there’s a lot of potential impacts here that really … they’re not available for analyzing at this point and we won’t have a chance to do that until after (the state and producers) reached their agreement,” Navarre said.

In the release, the mayors advise that potential changes to the existing tax structure should be applied only to new infrastructure and evaluated so taxpayers aren’t faced with excessive financial burdens as a result of the project.

Navarre said there is uncertainty about how changes to the existing tax structure to possibly a payment in lieu of tax structure would affect both state and local governments’ long-term revenues.

The Kenai Peninsula Borough Assembly earlier this year allocated $50,000 toward hiring a consultant, if necessary, to determine impacts of the project.

“The state should do (an) impact analysis,” Navarre said. “We shouldn’t have to spend that money unless we’re trying to effect legislation next year.”

Gov. Sean Parnell met various local government mayors on March 24 and signed an administrative order to establish the board.

In a March 25 press release from the governor’s office, Parnell said: “As we continue to advance an Alaska gasline, I am committed to ensuring local participation.”

The board will be made up of:

• The mayors of the North Slope, Fairbanks North Star, Denali, Mat-Su and Kenai Peninsula boroughs;

• The Commissioner of the Department of Revenue;

• The Commissioner of the Department of Natural Resources;

• The Commissioner of the Department of Commerce, Community and Economic Development;

• One organization member representing all state municipalities;

• Two members of the public who live outside of the five already represented boroughs.

The board will review available information, hold public meetings and provide annual reports including information about benefits and impacts, recommendations for tax statutes and other issues related to the project.

According to the release from the mayors, “alignment between our state and local governments should be at least as important as alignment between the state and producers.”

“We’re just not sure how it all fits together, but what we’ve been trying to do is, I guess, raise the fact that it’s a … big impact on (municipalities) and on the state,” Navarre said.

Kaylee Osowski is a reporter for the Peninsula Clarion. She can be reached at kaylee.osowski@peninsulaclarion.com.

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